Competing Stimulus Plans Seek To Signal That City Is Open For Business

10 May 2013

Copenhagen lags behind other major cities in business opportunities and job creation and leaders say that spells trouble

Businesses in Copenhagen are finding themselves in an unusual situation these days. No less than two large-scale plans will be presented this week, both filled with recommendations on how Copenhagen can build a healthy business environment and create growth in Greater Copenhagen.

A task force of businesspeople put in place by mayor Frank Jensen (Socialdemokraterne) earlier in the year is ready with its recommendations. Task force members say that their suggestions could create an estimated 5,000 jobs in and around the capital by 2020, especially among small and medium-sized businesses.

Small and medium-sized businesses, defined as companies employing up to 1,000 people, make up 99 percent of Copenhagen’s businesses and account for almost 50 percent of its employment.

Employment in medium-sized companies decreased 7 percent between 2000 and 2010. Small companies, mostly service related, showed modest growth during the same period.

Jensen acknowledged that Copenhagen has had an image problem among small businesses.

“I take this very seriously,” he told Berlingske newspaper. “We need to create growth across the board, not just the service industry.”

Jensen’s task force marks the second time in 18 months he has assembled a group led by Leif Beck Fallesen, the former editor of financial daily Børsen, to look at Copenhagen’s ongoing business issues.

Fallesen has said that in order to attract international companies, Copenhagen had to change from what he called an ‘authoritarian culture’ to a ‘service culture’.

"The culture lies in people, and this kind of cultural change takes time,” Fallesen told Berlingske. “The private sector has long recognised that success is about preserving and creating jobs, and the city government is now spreading the word to residents and the public sector.”

Meanwhile, the deputy mayor for employment issues, Anna Mee Allerslev (Radikale), is expected to unveil an extensive stimulus plan of her own. The Vækstplan KBH calls for the creation of a deputy mayor responsible for business, growth and employment after November's local election. It also proposes earmarking two billion kroner to support city businesses and attract more foreign workers and companies.

And just as both plans aim to create jobs in the short term, both say that in the long term, Copenhagen must become more welcoming to businesses or it will risk losing foreign investment to its neighbours.

While Jensen’s plan focuses specifically on solutions aimed at small and medium-sized businesses, Allerslev’s plan takes a broader and more comprehensive approach economic growth and employment.

“We have failed politically and put too little effort into promoting business in Copenhagen,” she told Berlingske. “We have been dragging our feet for the past 20 years, so our biggest challenge right now is to create growth and jobs in the capital.”

Allerslev said that towns such as Herning or Kalundborg had been far more proactive at promoting business, and she wanted to encourage the rest of Denmark to invest in Copenhagen.

“It is the country's growth engine. Every 100 jobs added in Copenhagen lead to the creation of 20 jobs elsewhere in the country,” she said.

Finding business at the top of the local political agenda is relatively new in Copenhagen. The capital has for decades suffered from a reputation of being hostile to business.

The region finished 70th out of the nation’s 98 councils in its ability to work with businesses, according to a poll by business confederation Dansk Industri (DI).

Although Copenhagen has enjoyed the best growth in Denmark at just over three percent, the capital is lagging far behind cities like Stockholm, Berlin and Hamburg. Between 2001 and 2011, Greater Copenhagen had an average an average growth rate of 1.4 percent, the growth rate in Stockholm during the same period was 3 percent.

The repercussions of the failure to create an attractive business environment in Copenhagen are felt throughout the entire country since the region accounts for over 40 percent of Denmark’s employment and revenue and over 50 percent of the country’s exports.

Allerslev said a key component of her plan was to have Copenhagen work closely with neighbouring cities, including Malmö, Sweden, to create growth throughout the entire region.

She recommended that a large portion of the 21 billion kroner spent each year to promote business in Denmark be used to attract businesses to Copenhagen, which she said would provide the greatest benefit to the country.

"We are at a crossroads and have to decide whether we are content to be the best in Denmark or if we want to get into gear and go after foreign investment.”

Source: http://cphpost.dk/business/competing-stimulus-plans-seek-signal-city-open-business